The paper explores the empirical dimensions of a New Open Economy Macronomy model characterized by credit market frictions. We find that these frictions are essential for the model to match a large set of moments of German data. Moreover, the simulated impulse response functions to supply and...

Transition to floating exchange rate regimes has led to sharp increases in nominal and real exchange rate volatilities with no corresponding changes in the distribution of fundamental macroeconomic variables. In the spirit of Dornbusch [1976], we assess whether nominal exchange rate overshooting...

The paper evaluates the empirical effect of labor market institutions on foreign direct investment (FDI) decisions. To that aim, a firm-level dataset is used, that describes French firms’ expansion strategies abroad over the 1992-2002 period. Following Head and Mayer (2004b), the determinants...

Meese and Rogoff [1983] show that macroeconomic models of the Seventies fail to outperform the random walk exchange rate forecasts. Macroeconomics thus provides useless information as far as out-of-sample exchange rate forecasting is concerned. However, since Meese and Rogoff's seminal paper,...

We study fiscal devaluation in a small-open economy with labor market search frictions. Our analysis shows the key role of both dimensions in shaping the optimal tax scheme. By reducing labor market distortions, the tax reform is welfare-improving. Yet, as it makes imports more expensive, fiscal...

The paper studies the role of labor market frictions in accounting for international business cycle comovement. To this aim, we embed labor market search and matching frictions in a two-country New Keynesian model. We show that labor market frictions amplify the international propagation of...

[fre] D'après Dornbusch [1976], la forte volatilité du taux de change nominal observée depuis la chute du système de Bretton Woods proviendrait d'une sur-réaction du taux de change aux politiques monétaires. Cet article évalue quantitativement la pertinence empirique de cette intuition...